SUMMARY OF MASTER’S DISSERTATION
Student Identification
Number81533412

NameHiroaki Nakaki

Title

A Case Study of Exploration and Exploitation in Enterprises
Abstract
Despite the low quality of existing products, services and technologies, what is the reason for thesuccess of the business? A central concern of studies of adaptive processes is the relation between theexploration of new possibilities and the exploitation of old certainties (March, 1991)．The explorationreferred to here means that enterprises explore new possibilities outside, and exploitation refers toimproving knowledge and similar knowledge owned by the enterprise and developing and utilizing them.
Schumpeter proposed a concept of combination as "new combination", and new knowledge iscombination of knowledge. In 1991, March insisted that it is necessarily for enterprises to keep balance
between exploration and exploitation to adapt market and continue their business in the long term. Since
then, even though there are many case studies in some industries, studies related contents, patterns,
required factors of the balance are rare.
Therefore, this research aims to clarify the reason for success in business through case study of 62
enterprises. Specifically, the key to balance is the number of combinations, combination patterns in thesupply chain, and existing a combination of both exploration and exploitation.
First, as a result of interview survey to three enterprises, I confirmed the combination of outside
knowledge by their exploration. Therefore, I made a hypothesis that more combinations lead to better
performance and defined exploration and exploitation to seven items. Regarding the combination ofitems, I analyzed the results of the interview survey for the founders, presidents or project managers of
62 enterprises in Japan and overseas who launched new businesses with existing technologies andservices. As a result, the following was found out and it was consistent with the hypothesis.
① The more the combination of items, the higher the value of business evaluation.
② The fewer the combination of items, the lower the value of business evaluation.
③ The value of business evaluation was low even if there were combinations within a single item.
④ There was a correlation between the number of combinations and the value of business evaluationin 62 enterprises (correlation coefficient 0.828).
However, even if there are many combinations of items, the value of business evaluation was low
at only one of exploration or exploitation, and which did not coincide with the hypothesis. Therefore, I
modified the hypothesis that both items of exploration and exploitation are necessary for thecombination. After comparative analysis of extreme cases, it was consistent with the hypothesis, and thefollowing patterns were found.
(1)
Based on the items of exploitation, the enterprise diversified their business by changing thecombination items of exploration.
(2)
Even though there is only one combination item, there is a combination of enterprises between
exploration type and exploitation type in the supply chain, and the enterprise of exploitation type did notneed to explore.
Key Word (5 words)
Exploration， Exploitation， New combination， Schumpeter， March3